There is an adage known as Hanlon’s Razor. It states:
“Never attribute to malice that which can be adequately explained by stupidity.”
If we’re being kind, you might say it was coined specifically to describe the government. Because nearly everything the government does usually results in massively stupid, unintended consequences.
For thirty years the government has been handing out money for people to go to college. And naturally all this easy money has had a huge inflationary effect on the price of higher education.
In fact, higher education is one of the most inflated costs in the US today. Since 1988, private university costs have soared over 129%. Not to be outdone, public universities have increased by more than 212% in the same period.
These rising costs have forced more and more people to the trough of government lending which has led to what any thinking person might consider predictable results…
At New York University, graduates with a master’s degree in publishing borrowed a median $116,000 and had an annual median income of $42,000 two years after the program… At Northwestern University, half of those who earned degrees in speech-language pathology borrowed $148,000 or more, and the graduates had a median income of $60,000 two years later. Graduates of the University of Southern California’s marriage and family counseling program borrowed a median $124,000 and half earned $50,000 or less over the same period.
According to the Wall Street Journal, “About 40 million people owe around $1.6 trillion in federal student debt, which makes up around 90% of the student debt that is outstanding.”
I’m not suggesting that the government has done it on purpose — although giveaways are always a popular strategy with the elected class! — but their programs to make higher education accessible to everyone and anyone have created yet another level of extreme economic stress for what used to be known as the middle class.
Another (unintended) crisis that needs to be dealt with.
So they’ve been working on a plan to alleviate the pain and fix the problem. And in true stupidity-over-malice fashion, the idea they came up with is …
Bear in mind, this is just a campaign talking point. If anyone in Washington were serious about fixing the student loan debt problem, they could sit down and negotiate some legislation that would do just that.
But that would require work, thinking and quite possibly upsetting some donor constituencies. So better for congress to throw it in the President’s lap and ask for the moon. Senator Chuck Schumer and Representative Elizabeth Warren have both pushed for forgiving up to $50,000 in loan debt per borrower.
Biden has countered with a lower number. He’s also advocated against any kind of blanket forgiveness. Instead he’s indicated to those who would be writing his executive order to make sure “the benefits of loan forgiveness flow to those who need it most” so everyone can see how equitable the government is.
The reality is it’s pretty unlikely that the President will be able to do any of this. According to former general counsel for the Obama Education Department:
“If the issue is litigated, the more persuasive analyses tend to support the conclusion that the Executive Branch likely does not have the unilateral authority to engage in mass student debt cancellation.”
Which, I’m sure, would be fine with Biden because then he can say he did his best and kick the issue back to congress who can summarily ignore it.
In All The Fairness Talk, They Ignore A Huge Point…
Any amount of student loans that is forgiven becomes the equivalent of another giant government stimulus check. It’s an indirect injection of excess money into an already overheated market.
It’ll do nothing whatsoever to help any struggling grads improve their job prospects or earn more money. It may take some of the sting out of buying little things like food and gas.
But the additional demand fueled by this unearned money (giveaways) will just keep prices on the upswing.
Nice try Washington.
Next week I’m going to show you why the government really doesn’t care about inflation and how they hide their financial malfeasance using some simple 4th grade math…
Make the trend your friend,
Editor, Streetlight Daily